Sweet Corporation owns machinery that cost $23,200 when purchased on July 1, 2017. Depreciation has been recorded at a rate of $2,784 per year, resulting in a balance in accumulated depreciation of $9,744 at December 31, 2020. The machinery is sold on September 1, 2021, for $12,180. Prepare journal entries to update depreciation for 2018

Explanation:

The journal entry is shown below:

Depreciation Expense A/c Dr $1,856

           To Accumulated Depreciation - Machinery A/c $1,856

(Being depreciation expense is recorded)

The depreciation expense is calculated for eight months (January - August)

The calculation is shown below:

= $2,784 × 8 months ÷ 12 months

= $1,856

answer; that person may have a larger tax bill to pay on income taxes;